Having just read Peter Lynch’s “One Up On Wall Street”, I must say that this is the one book that I wished I have read earlier. Not that I agree with the whole philosophy. But the book has many different elements that we as investors can learn a lot from. This article will exploit just one of the many things we can learn from Peter Lynch.

One of the very few things that Peter Lynch asks before investing in stocks is not the P/E ratio, dividend yield or the growth rate of a company. But rather, it is the: “Do I own a house?” question. Why a house? Peter Lynch beautifully elaborate that regular folks have an edge in investing in a house rather than a stock. Further, investing in houses have many merits that stocks do not have.

1. A house will be a money maker. That may not be obvious but the truth is, in 99 out of 100 cases, you will always make money in house. You won’t wake up one day and find that the house that you live in has declared bankruptcy or goes under. This kind of thing may happen with individual stocks.

2. A house is rigged in home owner’s favor. Home owners can put 20% down and enjoy the power of leverage. While some brokers will lend you that kind of money to invest in stocks, but if your stock price fell by 20%, you have to put more money into it. Not with a house. You are welcomed to take your time and pay off your mortgage even as your house value goes down in value. Lynch elaborates a wonderful illustration on how nobody will ask homeowners to “come up with twenty thousand dollars tomorrow or else you should sell off your two bedrooms”. When this happens to a stockowners, it is called margin call and it does happen a lot of time to leveraged stock investors.

3. Tax advantage. Your mortgage expense is tax deductible. Your stock purchase is not tax deductible. Only when you sell your stock at a loss, you can then a tax write off. Further in your later years, you can decide to sell your house and move into a bigger house, while avoiding tax on your profit. In stocks, what you sell at a gain, you can’t escape the taxman (unless illegally) and then when you make another good investment, you will be taxed later on your profit gain.

4. House Put a Roof Over Your Head. That won’t happen in stocks. You need to pay rent when you invest in stocks. When you bought a house, you can stay in it and avoid paying rents. Furthermore, you won’t likely to sell your house reading the headline: “Home Prices Take A Dive”. Also, the afternoon papers do not publish the daily closing price of your house in the classifieds and ten most active house in the neighborhood.

5. Everyone has an edge in house investing. It is handed down from your parents. You naturally knows how to poke around from the kitchen to the garage and ask the right question. You can drive around the neighborhood and see how many houses are being sold and what is being renovated. Further, before you make an offer of the house, you hire many many experts to search for termites, roof leakage, piping, wiring, cracks and others. Imagine that with investing in stocks. Some stock investors even spend more time clipping coupons for grocery than finding a good stock investment.

Novice Investing is the online investing guide for beginners. You can also post your own investing articles here

Tags: finance, investing, stockfinance, investing, stock

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A lot of people fail to reach their goals of being wealthy. As a result, people live frustrated and unfulfilled lives.
In spite of the desire to be wealthy, a lot of people fail to be affluent because of several mistakes. Failure to take charge of one’s finances, failure to cut unnecessary spending, lack of financial goals and incurring too much debt are some of the reasons why people fail to become wealthy.

So, if you have the desire to be rich, what are the possible reasons that account for you not being wealthy?

1. Not being in control of your finances. If you are not involved in the day-to-day finances of your household, then you can never be fully in charge of your financial situation. You must know the details of finances, investments, debts, retirement savings, etc. It is not recommended for you to hand over your investments and financial affairs over to a broker or financial consultant without keeping abreast of what is being done with your money and being involved in investment decisions. If you want to be wealthy, never give complete control of your money to someone else.

2. Not paying off your mortgage sooner. If you can afford it, pay more money every month towards your mortgage. It is estimated that an average homeowner ends up paying two-and-a-half times the purchase price of the home by stretching the payments over a long time frame. Paying off your mortgage sooner can save you large sums of money and help you build wealth.

3. Not controlling your expenditures. The reason why so many people are in debt is because they spend their money away in small, barely noticeable amounts, mostly on ‘unnecessary’ items. If you’re ever going to accumulate wealth, you must control all your money outflows.

4. Not setting goals. If you do not know what you want to achieve financially and how you plan to get there, you will probably never get there. To accumulate wealth, you need a plan. To be motivated to save money, you need something specific to save for. To succeed in accumulating wealth, write your goals down and visualize them, whether they are a relaxing retirement, a mortgage-free home, or an unforgettable vacation, or a larger bank account balance.

5. Incurring too much debt. If you are spending all your money paying interest on credit cards and installment debt, you will not have enough left for savings. When you buy on credit and don’t pay the balance off at the end of the month, you end up paying much more for your purchases. If you want to accumulate wealth, pay cash and stay away from credit card debt.

6. Not saving enough for retirement or starting to save too late. When you are young in your 20s and 30s, it is easy to think you have all the time in the world to accumulate wealth and save for retirement. Start saving early, and save at least 10% of your income every month, and you’ll be well on your way to accumulating wealth.
Avoid these 6 money mistakes and increase your chances of successfully accumulating wealth.

Roy is an Internet Marketer and is a member of Success University. He is
currently earning his Scholar Certification at the University. Roy’s Blog
http://www.my-success-university-blog.com

Tags: finances, goals, wealthfinances, goals, wealth

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You take out a loan to fulfil your needs not to pile up a heap of debt against your name. In order to avoid accruing huge debts you have to make it sure that the loan you are taking comes with low rate and flexible terms and conditions. To avail a loan that offers all these benefits you have to go for secured loans. Secured loans are minimal risk loan from the lender’s side as these loans are backed by collateral. So, he does not bother to offer these loans at low rate and with flexible terms and conditions.

Secured loans in UK are not accessible to all as they are supported by the home of the borrower. Only those homeowners who have sufficient amount of equity in their home can take secured loans. This attachment of the security in the form of the borrower’s home minimises the risk of the lender to a greater degree. Thus the lender rises above risk and offers the loan with terms in favour of the borrower.

Among the flexible terms of secured loans are included low rate and long repayment period. Both low rate and extended loan period contributes to keep the monthly repayment instalments small. So it becomes easy to make the repayments regularly without fail. This, in turn, helps to pay off the loan and avoid piling up debts.

In spite of all these benefits secured loans are not recommendable to all. It is true that secured loans are not risky for lenders but not risk free from the borrower’s front. In the event of failure the borrower have to lose his home that he offers as security. Therefore, if you are not sure of your financial future than it is better not to go for secured loans. However, if you are confident of your repayment ability than there can be nothing better than secured loans.

The author is a business writer specializing in finance and credit products and has written authoritative articles on the finance industry. He has done his masters in Business Administration and is currently assisting Loans-Park as a finance specialist.For more information about loans visit us at http://www.loans-park.co.uk

Tags: finance articles, loans articles, secured debt consolidation loans articles, secured loans articlesfinance articles, loans articles, secured debt consolidation loans articles, secured loans articles

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